Unit 1.6 Multinational Companies (MNCs)

Vocabulary flashcards covering the definition, impacts, and management tools related to Multinational Companies based on the Unit 1.6 lecture notes.

Multinational company (MNC)

An organization that operates in two or more countries.

Host country

Any nation that allows a multinational company to set up within its borders.

Tesla’s Gigafactory in Shanghai

Tesla’s first factory opened outside of the USA, established in China in 2018.

Protectionist policies

Trade barriers that businesses may seek to avoid by becoming MNCs and producing directly within a target market.

Repatriation of profits

A potential negative impact on host countries where an MNC transfers its earnings back to its home country.

Knowledge and technology transfer

A positive impact where MNCs share expertise and technical advances with the host country's economy.

DaimlerChrysler

A merger formed in 1988 by Germany’s Daimler and America’s Chrysler, recognized as one of the most disastrous corporate mergers in automotive history due to culture clash.

Glocalization

An approach used by MNCs to integrate local and international cultures in the consumption of goods and services.

STEEPLE analysis

A toolkit used to classify external environmental factors as opportunities or threats to a multinational firm.

Hofstede’s cultural dimensions

A framework in the Business Management Toolkit used to analyze cultural differences and potential clashes between organizations from different countries.

Economies of scale

The cost advantages that MNCs gain due to their super-sized operations, serving as a primary reason for businesses to expand internationally.